CMC Markets Weekly Report
U.S. stocks closed higher Friday, shaking off losses following disappointing new-home-sales data. The Dow Jones Industrial Average rose 46.77 points, or 0.3 per cent, to close at 15,010.51. Both the S&P 500 Index and the Nasdaq Composite Index, however, snapped their two-week losing streaks. The S&P 500 index rose 6.54 points, or 0.4 per cent, to close at 1,663.50 and the Nasdaq Composite advancing 19.09 points, or 0.5 per cent, to close at 3,657.79, for a weekly gain of 1.5 per cent.
U.S. stocks closed higher Friday, shaking off losses following disappointing new-home-sales data. The Dow Jones Industrial Average rose 46.77 points, or 0.3 per cent, to close at 15,010.51. Both the S&P 500 Index and the Nasdaq Composite Index, however, snapped their two-week losing streaks. The S&P 500 index rose 6.54 points, or 0.4 per cent, to close at 1,663.50 and the Nasdaq Composite advancing 19.09 points, or 0.5 per cent, to close at 3,657.79, for a weekly gain of 1.5 per cent.
Earlier in the morning, stocks faced headwinds from the release of new home sales data, which was much weaker than expected. Sales of new homes in the United States fell from a 455,000 annual rate in June to 394,000 in July, below expectations for a result near 490,000. The weekly Economic Cycle Research Institute leading index eased from a 4.7 per cent annual rate to 4.5 percent, casting doubts on the nascent housing recovery, the central bank currently views as a rare growth centre in the economy.
Over the weekend, central bankers from around the world gathered for their annual symposium at Jackson Hole, Wyoming. There was some discussion among the speakers over the potential winding back of Fed's $US85 billion-a-month bond-purchasing program.
In commodity markets, world crude oil prices rallied with a disappointing US new-home sales report fuelling speculation about the Federal Reserve's intentions to wind down stimulus. New York's main contract, West Texas Intermediate (WTI) crude for October, has closed at $US106.42 a barrel, a gain of $US1.39 from Thursday. The European benchmark futures contract, Brent North Sea oil for delivery in October, added $US1.14 at $US111.07 a barrel in London trade.>
Gold prices settled at their highest level in 11-weeks high after weaker US home sales data stoked hopes of sustained stimulus measures from the Federal Reserve. Gold for December delivery, the most active contract, on Friday rose $US24.90, or 1.8 per cent, to settle at $US1,395.80 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement level since June 6. Gold prices shot higher after data showed US sales of newly built homes fell 13.4 per cent in July to their lowest level since October.
Platinum prices touched a fresh four-month high. Platinum for October delivery rose $US1.50, or 0.1 per cent, at $US1,541.60 a troy ounce on the New York Mercantile Exchange - the highest settlement since April 9 - amid hopes that stronger global manufacturing activity would lead to greater demand.
Copper prices settled slightly higher on the London Metal Exchange (LME), supported by a run of strong economic data, although trading was cautious ahead of the weekend. At the PM kerb close on Friday, LME three-month copper was up 0.5 per cent at $US7,360 a metric ton.
Aluminium also traded up 0.5 per cent at $US1,892.50 a ton. Business activity in the eurozone in August rose at its fastest pace in more than two years, while in China a gauge of nationwide manufacturing activity on Thursday suggested the economy was stabilising.
The US dollar eased against major currencies in European and US trade on Friday in response to weak US new home sales data. The Euro rose from lows near US$1.3335 to ended US trade near US$1.3380. The Aussie dollar is higher at 90.39 US cents.
In the US, activity in the factory sector rose to a five-month high, as employment and new orders gathered steam. The LME is closed on Monday for a UK public holiday.>
In equity news, Nib Holdings (NHF) is expected to post full year results while Caltex Australia (CTX), Spark Infrastructure Group (SKI) and Boart Longyear (BLY) are slated to announce first half earnings
Frequently Asked Questions about this Article…
US stocks closed higher on Friday: the Dow Jones rose 46.77 points (0.3%) to 15,010.51, the S&P 500 gained 6.54 points (0.4%) to 1,663.50, and the Nasdaq Composite advanced 19.09 points (0.5%) to 3,657.79. The Nasdaq also ended the week with about a 1.5% gain, and both the S&P 500 and Nasdaq snapped two-week losing streaks.
US new-home sales fell from a 455,000 annual rate in June to 394,000 in July, well below expectations near 490,000. The much weaker-than-expected housing data weighed on markets and boosted speculation that the Federal Reserve might keep stimulus measures in place rather than wind them down quickly.
Central bankers at Jackson Hole discussed, among other topics, the potential winding back of the Fed’s $US85 billion‑a‑month bond‑purchasing program. Any comments about tapering or changing stimulus can move interest rates, bond yields and risk assets, so investors watch those discussions closely.
Commodities rallied after the weak US housing data and Fed speculation: WTI crude for October closed at US$106.42 a barrel (up about US$1.39), Brent at US$111.07 (up US$1.14), December gold settled at US$1,395.80 an ounce (up US$24.90 and the highest since early June), platinum hit a four‑month high at US$1,541.60, LME three‑month copper rose 0.5% to US$7,360/ton, and aluminium traded up 0.5% at US$1,892.50/ton.
The US dollar eased against major currencies following the weak new‑home‑sales report. The euro strengthened from lows near US$1.3335 to about US$1.3380, and the Australian dollar was higher, trading around 90.39 US cents.
The report noted the Economic Cycle Research Institute leading index eased slightly from a 4.7% annual rate to 4.5%, casting some doubt on the housing recovery. Separately, US factory activity hit a five‑month high as employment and new orders improved, eurozone business activity rose at its fastest pace in over two years, and Chinese manufacturing gauges suggested stabilisation.
Yes — Nib Holdings (NHF) was expected to report full‑year results, while Caltex Australia (CTX), Spark Infrastructure Group (SKI) and Boart Longyear (BLY) were slated to announce first‑half earnings. These releases can affect share prices and investor sentiment for those stocks.
The article noted that the London Metal Exchange (LME) would be closed on Monday for a UK public holiday, which can affect trading in metals and related market liquidity.
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